Published: 14/07/2026 By ECAP
GROWING UNEASE
The British Pound came under pressure at the start of the week as rising tensions in the Middle East unsettled financial markets, prompting investors to move towards safer assets. Higher oil prices also added to uncertainty. Traders remained cautious ahead of political developments in the UK and a speech from Bank of England Governor Andrew Bailey, with his comments expected to offer clues about the outlook for the UK economy and interest rates.
The Euro strengthened at the start of the week as rising tensions in the Middle East boosted demand for safer assets. Higher energy prices also raised concerns that inflation could remain elevated, reinforcing expectations that borrowing costs may stay higher for longer. With little economic data due from the Eurozone, the single currency’s direction was largely driven by wider market sentiment and geopolitical developments.
The US Dollar found support at the start of the week as renewed fighting in the Middle East increased demand for safe-haven assets. However, those gains faded as market confidence improved. Investors are now focused on upcoming US inflation data, which could influence expectations for the economy. Ongoing geopolitical tensions are also likely to remain a key driver of the US Dollar in the near term.
Data supplied by GC Partners